A big indoor mall opens Wednesday, eight months after the area’s first stand-alone Starbucks hit town. Several national homebuilders have staked ground as bulldozers prepare more farmland for construction.
The Imperial Valley -- a desert region of 160,000 people and a notoriously high unemployment rate -- is witnessing a surge in new homes and stores for middle-income families. Homebuilders are betting that the Imperial Valley will become San Diego’s next bedroom community, another example of how California’s climbing home prices are forcing people to live farther from work.
The 230-mile round trip to San Diego and back takes about four hours, but here it’s easy to find a new home for less than $300,000. In San Diego, the median price of a resale home hit $580,000 in January.
“It’s the only affordable market left in Southern California,” said John Trotter, a senior vice president at Capstone Advisors Inc. of San Diego, which is planning to build thousands of homes.
Homebuilders say less than 10% of their buyers are from San Diego, but there are scattered signs of long-haul commuters in and around the Imperial County seat of El Centro. National Steel & Shipbuilding Co. subsidizes about eight vans to shuttle employees to its San Diego shipyard.
A unit of General Dynamics Corp., National Steel says about 100 of its 4,200 San Diego employees live in the Imperial Valley.
Laura Ramirez, 32, moved to El Centro with her husband four years ago and commuted to her medical assistant job in San Diego.
After three years of renting, the couple paid $226,000 in January for a house in an El Centro subdivision where grass has yet to be planted on all the lawns.
“We were never going to be able to afford a home in San Diego,” said Ramirez, who now works at El Centro Regional Medical Center.
For now, homebuilders are simply making up for years of neglect. Construction failed to keep up with population growth in the 1990s, according to a recent San Diego State University study. About one-fourth of homes in the Imperial Valley were built before 1949, according to market researcher Laurin Associates Inc.
Homebuilders have neglected the Imperial Valley partly because electricians, plumbers, roofers and other contractors took jobs in faster-growing parts of California, said Barry Garman of Victoria Homes LLC of Carlsbad, which has built 3,000 homes in the area.
Imperial is the ninth-fastest-growing of California’s 58 counties but ranks in the bottom half by population.
San Diego County, expanding at a slower rate than Imperial, is adding nine times more people.
There are more than 18,000 single-family detached homes slated for construction in the Imperial Valley, according to MarketPointe Realty Advisors.
“As soon as you get the quality of life issues resolved -- the mall, more schools -- more young families are going to come out,” Garman said.
Whether or not Imperial Valley becomes a San Diego suburb, the new homes and stores are accelerating a transition from its agricultural roots.
El Centro and the neighboring towns of Calexico, Imperial and Brawley were settled around 1900 when an irrigation project diverted the Colorado River to the desert. It is still a farming powerhouse -- rich with cattle, alfalfa, lettuce, carrots and sugar beets.
Agriculture is the region’s main employer, followed by government; there are stable jobs at two nearby state prisons, with the Border Patrol or the California Highway Patrol, or in schools.
Corky McMillin Cos. of San Diego, one of the Imperial Valley’s largest builders, has been selling most of its homes to government workers, said Rick Jarrett, a sales manager.
Despite the construction boom, Imperial County’s unemployment rate remains stubbornly high -- 19.7% in December, making it second-highest in California and well above the statewide rate of 5.4%.
A recent job fair for 35 tenants at the new Imperial Valley Mall attracted nearly 13,000 people. About 2,300 are expected to find jobs at the mall’s 100 stores, which includes anchors Dillard’s, Robinsons-May, Sears and JCPenney, and a 14-screen movie theater.
Many of the mall’s core customers are expected to come from Mexicali, a metropolis of 800,000 less than 10 miles away on the Mexican side of the border.
Heather Herring, leasing manager for the 780,000-square-foot mall, noted that Mexicali is the largest Mexican city along the 2,000-mile border without a regional shopping mall on the U.S. side.
Richard Rodiles, who has been unemployed since losing his job selling phone service in December, had hoped to find work at the mall. He interviewed at the job fair but has yet to receive any offers. He finds pickings slim in the help-wanted ads.
“You pick up the newspaper and you see a bunch of convenience stores, some 7-Elevens,” Rodiles, 27, said while waiting for his brother, an electrician, to get off work at the mall. “The mall will have a good chunk of [jobs], but it’s not going to solve the valley’s problem by far.”
Given the job picture, McMillin wonders how much new construction is realistic. The developer entered the market in 2001, but since then, nationwide companies like Pulte Homes Inc., D.R. Horton Inc. and KB Homes have come in.
“A lot of these builders jumped on the bandwagon because it’s been such a good market,” Jarrett said. “There are not a lot of people making the [San Diego] commute. Who’s going to buy all these homes?”
Steve Hyman, president of Westmount Properties LLC, disagrees. His says his Palm Desert company has bought more than 6,000 acres in Imperial Valley and sold much of it to homebuilders. He thinks the scarcity of land in San Diego will turn Imperial Valley into a bedroom community.
“Where else are you going to go?” he said.